A Music Industry Case Study 581
spmkk writes "The NY Daily News has an uplifting look at the fate of a (hypothetical) 4-piece band "making it big" in today's RIAA-driven music industry. The condensed version: A band that sells 500,000 records for $8,490,000 gross ends up (after a few iterations of the new math) with $161,909 in their pocket. Split four ways, that's a whopping $40,477.25 each for a record that probably took close to a year to produce. And this is for a record that goes gold (as per the article, only 128 of some 30,000 records released in 2002 were so privileged). And I bet you wanted to be a rock star when you were a kid..."
You know why? (Score:5, Funny)
Re:You know why? (Score:3, Interesting)
Re:You know why? (Score:3, Interesting)
Re:RIAA pays more than pirates do. (Score:3, Insightful)
They won't get royalty checks for 20 years on the recording session they spent a few months on, but what's so bad about that? I don't get paid for 20 years for the network I spent 6 months perfecting.
The recurring theme around here seems to be 'update the business model'... How about a business model that doesn't include money for recordings anymore?
No hypocracy involved...
Re:RIAA pays more than pirates do. (Score:5, Insightful)
How about a business model that doesn't include money for recordings anymore?
Begs the question. I don't really want to see any but a few bands live. I don't want them to reshingle my roof. I don't want them to wash my car. What I want are recordings of their music. There's a lot of money in sales of recordings; surely more of it could find its way to artists.
Re:RIAA pays more than pirates do. (Score:4, Interesting)
There are dozens of punk rock and smaller alternative bands that tour every year, with or without a big budget. Greedy whores like Bikini Kill won't leave home without a guaranteed $10k payout, but bands like Armchair Martians or Scared of Chaka will roll out for a few hundred bucks TOTAL. Sometimes things get fucked up and they have to play to a small crowd and get paid with beer and food, but that goes with the territory.
In the final analysis, bands don't really need enormous touring busses, 5 star hotels and new guitars for every show. They don't need their promoter taking 10% of their cut. If you cut down your overhead and subscribe to the DIY philosophy, you can make it on your own without a major label rolling out a magic carpet for you.
Remember, most bands you know and love probably started out in someone's basement or garage, and probably borrowed the minivan on the weekend to go to shows. Then again, bands these days are basically born from corporate labels and aren't as homegrown as they used to be.
What's worse... (Score:5, Funny)
Re:What's worse... (Score:3, Funny)
Re:What's worse... (Score:5, Funny)
Re:What's worse... (Score:5, Funny)
Obligatory link (Score:5, Interesting)
It is written by Steve Albini, who produced (besides a few bands you maybe might have heard of) a little no-name act called Nirvana. Everyone should read it. Of course, most people have, which is why i predict it will be linked at least three more times somewhere in this story discussion.
Re:Obligatory link (Score:5, Interesting)
If you're at all curious about the recording process of a Major-label band, it's a must-read.
Re: (Score:3, Interesting)
Re:Obligatory link (Score:3, Informative)
Re:Obligatory link (Score:5, Informative)
But I don't understand why everyone gets so bent about Hillary Rosen and focuses all their attention on her. She's just a prostitute. The industry will ALWAYS have a prostitute. It almost seems like the Slashdot et al crowd is almost in collusion with the RIAA in this blatant misdirection. Is she scum? Yeah. But who cares? So is Valenti but he's a salesman, not the guy driving the vehicle.
It isn't anything you said, I'm just ranting.
Re:Obligatory link (Score:5, Interesting)
We despise these figure heads because they actually alter laws to favor the industry. Did you ever read the DeCSS depositions of Jack Valenti? They're a funny, if not scary, read. See them on 2600.com's website. I recall one place where good old Jack was being questioned by Corley's counsel. He was asking him all kinds of questions about the industry, and the opposing lawyer kept objecting, stating that Jack wasn't an expert witness and couldn't answer the questions. Finally, Corely's lawyer spouted off something that I found very telling (paraphrased): "You're telling me that this guy, who testifies before Congress and lobbies to change the laws, isn't an expert in these matters?!?"
The point is, Joe Beancounter from the RIAA or the MPAA doesn't get the publicity shots shaking Senator Hatch's hand (Orin Hatch, I believe, is pretty pro-industry in these matters, in spite of the appearance of his "Napster Hearings" some years ago). It's these hi-profile weenies (Hilary and Jack) who affect legislation.
That is why we despise these people so much.
Who's Fault? (Score:5, Insightful)
No one said the music business was easy either, and we all know the success stories are certainly the far and away cases.
Re:Who's Fault? (Score:2)
Re:What's Wrong With That? (Score:5, Insightful)
The problem is that the companies take their profits first before costs are taken out. If the system were truly fair, record companies would take their profits with the artist at the end of the day when all costs have been calculated. Yes, it is a business and the record companies deserve the right to make a profit on investment, but would you want your investment company taking their profits before costs were calculated? The folks that manage my portfolio take 1.5% of the portfolio value at the end of each quarter, not at the beginning of the quarter, therefore their income is dependant upon the performance and my costs to them are based upon mutual growth. Not bleeding the portfolio dry.
Re:What's Wrong With That? (Score:4, Interesting)
But of course, that's the point. If they didn't take their profits when they do, then many, many more acts would be profitable... but the recording companies wouldn't make quite as much money, and (heaven forbid) would actually have to take on some amount of risk along with the band.
As things stand, the recording companies structure deals so that they always make a profit, no matter what. To the recording companies, an "unprofitable" band is one that they do not have to pay any money. See the small problem here?
Hmmm... (Score:5, Funny)
Daniel
Re:Hmmm... (Score:5, Informative)
Negotiating Position (Score:5, Interesting)
Why is the negotiating position of these bands so weak that they end up with such a shitty deal?
Re:Negotiating Position (Score:5, Insightful)
It costs quite a bit to make an album, and even more to market it. Most garage bands don't have that kind of cash laying around. So they need someone to finance it.
It's like going to a loan shark and getting a deal with 80% interest.
A band can either take the shitty deal, or go back to playing in their garage where no one will ever hear of them.
Re:Negotiating Position (Score:5, Interesting)
Re:Negotiating Position (Score:3, Funny)
and yet you are talking about Creed? I'm not sure I follow your logic.
Re:Negotiating Position (Score:5, Insightful)
And then of course if you decide to back out of the contract, the company owns the copyright to your music, making it more difficult to find a new label (because you can't put out any of your old music). Besides leaving your label at that point means other labels probably won't want to touch you because _they_ won't make as much money from you, since you'll know what you're really worth. Bummer huh?
Re:Negotiating Position (Score:5, Insightful)
There are of course some obscure bands signed now and then if they're willing to accept a contract bad enough (because it's the Record company that's taking the risk you see). I suspect that even those hundreds of records the company "loses money" on are actually profitable (or at least break even) with their fancy accounting practices, but why bother signing a bunch of good sounding bands (and taking up valuble shelf space), when you can sign a few good looking bands and mass market the heck out of them for a few years, which makes megabucks (although less than it used to) for a lot less effort?
Re:Negotiating Position (Score:5, Insightful)
Artists are always being taken advantage of and there are some great examples in the most recent issue of Rolling Stone. "Why do hungry young artists keep signing these one-sided deals? Because they're too young and too green to have any idea how deep they can slide into debt. Because they don't consider the long-term complications of signing their lives away to a lard-assed corporation that will be perfectly happy to write them off as a bad debt at tax time. And because the label has no incentive to do anything on the cheap, sine the artist pays for everything. The dice are loaded. The deck is stacked. And the house never, ever loses." Good article in general, worth picking up.
Re:Negotiating Position (Score:4, Interesting)
That's the point: they don't have as much money riding on these artists as you think. The costs are pushed onto the artists. All the labels do is advance the money for the recording, music video production, equipment, tour expenses, promotion, etc. and in return pay the artists pennies on the dollar, often divided 3, 4, more ways between the members of the group.
no alternative (Score:4, Interesting)
Each album can cost hundreds of thousands of dollars to record. Each music video also costs tens or hundreds of thousands of dollars. Radio stations must be paid off to get a band's singles in the rotation. And the album has to be manufactured, which costs money as well. Then the album must be distributed, which costs money and requires a business relationship that labels have and most musicians do not.
There are dozens of bands in every city around the world that want to make it, but only a handful of major labels. This is why bands get the short end of the stick.
Re:Negotiating Position (Score:3, Insightful)
- Because they are living in their car/van/truck.
- Because they are playing local clubs for $200/night (divided amongst all the band members, crew, and music store where they bought the gear on credit.)
- Because they see nothing but dollar signs when some guy in a suit comes to see them play.
- Because they'll do anything to get away from that day job at Burger King.
- Because they don't know that a lawyer's advice can be a valuable thing sometimes.
If someone's waving the temptation of fame&fortune in front of you, would you be able to think straight?Re:Negotiating Position (Score:3, Interesting)
Re:Negotiating Position, Doh (Score:3, Insightful)
Re:Negotiating Position (Score:3, Insightful)
If the band doesn't want to sign, the labels can always find someone else to push through the pipeline. If the labels aren't interested (and the big ones have an oligarchy), the band doesn't have many options.
Or at least they didn't. That's why online music distribution is so scary. Piracy is a real threat to the music industry; but so is a distribution system that gives everyone equal access.
I feel that the focus on piracy -- and people's insistence that it's ok -- have diverted attention from the other issue, open access to distribution. We need a system that lets musicians sell their music to global audiences without middlemen taking out substantial chunks.
If someone wants to make a deal with a label because the label can hook them up with producers or songwriters, or because the label can promote them, that's fine. But they shouldn't be coerced into these deals just to reach the market place.
It's not just the labels that do this. If you want to sell your house, you have to pay a broker to put it in the MLS -- why isn't there a web site that charges you $4.95 to list the house for 6 months? People tried to set those sites up, and they failed in the face of opposition from large real estate brokers, who fought to keep their inventories off of them. People who have set up tollbooths fight pretty hard to hold on to them.
Re:Negotiating Position (Score:3, Interesting)
It might piss people off to hear this, but my guess is because musicians have shitty union representation.
For example, most actors are desperate for exposure and most movies don't make profits, but when that kid that played Harry Potter agreed to star in the movies for a relatively small sum, the British actors union stepped in and said the studio had to pay him millions, link [smh.com.au].
Re:Negotiating Position (Score:4, Informative)
The members of the RIAA have virtually identical business practices so if you don't like the deal offered by say Capitol, you can't go to Sony and expect much better. And you can't hold out on Capitol, because they don't really need you.
Combine this with the fact that the music industry has been marketing toward a younger and younger audience (remember when the tastes of 20-somethings determined popularity? How many people over 20 can name more than 2 rock acts that had a #1 hit in the past year?). A young audience doesn't have a lot of history of listening to music. You can repackage an old formula (Nirvana, Pearl Jam, Green Day) and sell it to 15 year olds; they'll never know the difference.
Indie acts can take a far larger cut of record sales (though indie labels can frequently be desperate enough for cash to be just as underhanded as the majors, and there's always the danger that your label will go bankrupt), and indie acts take a FAR larger cut of touring and merchandise. So someone signed to Merge or Matador (2 fairly well known indie labels) selling 50,000 albums a year would probably make as much as someone on Sony selling 500,000. How many indie acts sell 50,000 albums per year? Not many.
So why not self-release? Well it takes a _huge_ amount of starting capitol. Say you want to print 5000 albums, about a minimum if you want to be stocked in stores just in your home state. At that quantity, CDs cost about $3 per, so that's $15,000. Not a small amount of money for your average musician. Of course, with no label, you get no promotions and no automatic opening gigs with more promanent acts, so selling those 5000 CDs to pay back mom & dad that $15,000 is quite a trick.
Can it be done? Yes. Is it worth it? Probably not. These days I can't imagine why anyone would sign to a major label unless they really wanted to see themselves on MTV. From a financial and creative standpoint, it makes very little sense.
$40k.... so what? (Score:2, Insightful)
Re:$40k.... so what? (Score:4, Insightful)
Re:$40k.... so what? (Score:3, Funny)
You could've at least NOT quoted a song [azlyrics.com]
Re:$40k.... so what? (Score:5, Insightful)
Customer: "Do you have the latest radiohead?"
Clerk at a PC: "That'll be ready in 10 minutes, $5.00 please."
This recording industry is spending millions and millions manually doing the job of a good database. To make a long story short (too late) the problem is the record company being overpaid for a service it doesn't provide.
Re:$40k.... so what? (Score:3, Insightful)
So take a look at the musicians. What do they risk by making the album. Ignore the fact that they have to have talent, which usually requires many years of unpaid work to get good enough to compete, this is typical for many jobs. Think "college"... "internship"... etc. But at the point they sign a contract, what do they risk? If there is a good chance that they'll actually lose money by signing the contract, then they shouldn't sign it, unless the potential reward for success far outweighs the potential risk. If the odds are that they'll at least eek out a managable salary from it, and 40k a year is definitely managable, then it's probably a good deal. The problems arise with the conditions of the contract that go beyond the yearly salary on one album. If its a one shot deal, one album, get paid, and renegotiate on the next one, then this is a VERY fair deal. I realize that it probably doesn't work that way. The record industry fleeces the artists. They own your soul, AND your copyrights. And that sucks.
But the artists signed the contract. And look at all the fringe benefits. I mean... groupies! And what is the alternative? Be a sanitation engineer, play clubs at night, sell a few albums via the internet, and make more money, but only grade B groupies.
Of course, *I* have groupies... and while it can be fun, definitely not something I'd consider as a condition of a contract.
-Restil
I am sorry for a bad sounding comparison.. (Score:2, Interesting)
Disgusting.
Only the biggest stars actually get good returns.
All others work almost for free..
Two words: Live Music. (Score:5, Insightful)
Go see live music. If you live in a city larger than 50,000 people, there should be a few bars that get live music. Go see them. If you like them, buy their music. No record company required. No inernet piracy required. Just good music.
If they wanna post stuff for free on the internet, more power to 'em. I'll download that. But I don't expect them to.
Re:Two words: Live Music. (Score:2)
Re:Two words: Live Music. (Score:4, Insightful)
Of course, there's no reason one HAS to sign with a big label, as a musician. Sure they've got the distribution channels, marketing, etc. -- but if your complaint is that the music industry is run by cartel, then you'd better be ready to innovate the business practices, and not just make good music. There's no law against starting your own label, and while it's a difficult challenge, it's the only legitimate way, working within the system, to obsolete the cartels.
Re:Two words: Clear Channel (Score:5, Informative)
Thanks to the joys of deregulated radio...
Clear Channel owns the air time.
Clear Channel owns the play lists.
Clear Channel owns the concert venues.
Clear Channel owns the concert promotion.
Clear Channel owns the ticketing companies.
So, unless you want to play in a bus shelter, unadvertised, playing songs that no one has ever heard of, guess who makes all the money?
Why do you think all those radio stations that sound exactly the same as each other have exactly the same bland "Front Row Seats!" competitions, the same bland "Sold Out Seats!" competitions and the same bland DJs who're supposedly on "Hard Rock" stations giving out tickets to go and see Britney Spears with them at the same three venues as every other gig you ever hear about? Clear Channel owns the entire chain from start to finish, nationwide. Even when there is a chink in their defence, the artists all know damn well that if they dodge Clear Channel in one city, they'll be blacklisted from every other one across the nation.
Everyone criticises the RIAA on slashdot. After all, they're the evil monopolies, making all the money at the artists' expense. The problem is, to get their product out, they have to deal with a monopoly. I'm not defending them but they're also not making money hand over fist either - not because of piracy but because Clear Channel squeezes every last penny out of music, shoe-horning it in to an easy to sell, nationwide generic sludge. Bad as the RIAA are, perhaps it's worth going after the real culprits.
A Studio Story (Mixerman) (Score:3, Interesting)
I came across this the other week, it's a long but very good read. I honestly don't know how true it is, but I read it all anyway
It's the story of a guy who's mixing a band for a big label, and his trials and tribulations.
The Daily Adventures of Mixerman [prosoundweb.com].
It's been said before, but.... (Score:5, Insightful)
Get the hell out of the way.
And don't forget the artists. Attend local shows, support Independent acts. Buy merchandise, hell, mail a check, but find other ways to support your favorite musicians without giving a tithe to the RIAA. It can happen.
Check out Courtney Love's thoughts on this... (Score:5, Informative)
It's more in depth than this article and comes from someone who has been there, a good read..
a retread of albini's math, but... (Score:2)
it seems you either have to do it all yourself, and jam econo a la mike watt, or become huge. i'm glad more bands are realizing that jamming econo will enable them to keep going.
google for steve albini's math if you don't know what i'm referring to.
Slave to RIAA -- Unemployment . . . (Score:2)
Hey, at least they have a job $40k is more than unemployment.
This makes me... (Score:2)
And the point is what? (Score:5, Funny)
On the one hand I'm told as a software developer it's not about the money. I should code just for the love of it!
On the other hand I'm supposed to be outraged because a rock star only makes $40k off a record deal?
And the rock star get's groupies, whereas the programmer just has pr0n.
So? (Score:4, Insightful)
At my job, I get approximately 0.307% of the total gross of the sales of the software I work on.
I spent 21 years in school working to get my job (which wasn't cheap), and I've been working in my industry for 8 years.
I also work well over 40 hours a week, and I'm never, ever going to get a product endorsement deal. (They probably won't either, but if they do, it's extremely lucrative.)
I'm not saying they're not getting screwed, but I do want to try to keep things in perspective.
Ric Shrimpton said it best (Score:4, Funny)
Re:Ric Shrimpton said it best (Score:4, Funny)
Courney love also did the math (Score:5, Informative)
It Won't Last Long (Score:5, Interesting)
1) Radio monopolies. As has previously been discussed on /., this means that few bands ever get play time on the radio. In fact, radio today pretty much sucks unless you really like "Top 40" music. Now, there's a reason that Top 40 music used to be Top 40 -- it was popular (and usually fairly good) music. But that's not really the case anymore.
2) Paying artists. The Music Industry can whine all it wants about "artists getting money" this and "artists getting money that" but the truth of the matter is, Item No. 1 makes the music industry so competitive that, after all the marketing is finished, they can't really afford to give any money back to the artists. Artists in today's music industry are somewhat like the sweatshop girls who make Abercrombie and Fitch cargo pants (or Nike shoes, or you name it): they produce a product sold for an extreme premium but are poorly paid. Incidentally, the premium goes not directly into the pockets of the responsible corporation, but instead into marketing and promotion -- but only of the artists which the record company likes.
I firmly believe that we're about to experience a paradigm shift in entertainment delivery. The era of free music -- as it was in the 16, 17, and 1800s -- will once more be upon us. Recorded music will be free, and niche internet radio/community music sites will be responsible for the creation of new hits and pop sensatia (remember Michelle Branch? MP3.com, not the radio, was instrumental in her stardom). Artists will instead earn their money as they did 100 years ago: in concert. Ticket prices will skyrocket (and fans will pay), and probably move to an auction-dominated system -- which will equilibrize ticket prices. Some artists might be forced to get day jobs. But art, music, etc., they will all move onward...
What about the other 49 failures? (Score:5, Insightful)
No, I'm not an RIAA apologist.
What it comes down to is this: Record companies are like banks that make very high-risk loans. Because most of their loans fail, they have to make the money back on the few loans that succeed.
Combine this with groups of less-than-aware children (the soon-to-be-signed band) that see nothing but the size of the advanced money and you end up with the mess that the music industry has become.
Oh, and before anyone else trys: Bands (in general) don't make money from concerts. There are way too many fingers in the pie in the concert business. Only artists who really live on the road (and keep their concert production scaled back) are making money. Even then, it's just a living wage.
Re:What about the other 49 failures? (Score:5, Informative)
Re:What about the other 49 failures? (Score:3, Interesting)
Except in this case the bank is making a loan for a product that the bank ends up owning. Sort of like your mortgage company loaning you money for a house and after you make all the payments, they end up owning it.
On the flip side, no one ever said that a musician should make a lot of money. Historically, musicians have always been starving artists and I don't see that changing any time soon.
How much does it cost to make a record? (Score:3, Interesting)
"What it comes down to is this: Record companies are like banks that make very high-risk loans. Because most of their loans fail, they have to make the money back on the few loans that succeed."
But it comes down to how much money it costs to make a record. Can I put this to you:
Record are expensive to make, because there is so much money to be made. If there was only a budget of $10k to make a record, it would cost $10k, because really thats all that is needed.
Sure you can use $20k mic's and $200k in studio time, but one of those wooden vocal sound box in a studio in the Caribbean sounds the same as a wooden vocal sound box in Bob's basement. And a $20k mic really doesn't sound 100 times nicer than a $200 one and they all pretty much sound the same on FM radio and 128kbit MP3!
Tighter belts mean less money spent pointlessly, means lower risks per act.
Look at Web design as an analogy, in boom times companies spent millions on developing their web site, now you can get similar web sites done for a couple of thousand dollars.
There's more to it than money (Score:3, Insightful)
Your manager may be shady and take large profits. He may spend them on foolishness and not re-invest in your band. He may sleep around all the time and not care about expenses, and you will pay dearly because of him.
Do not trust such businessmen. They are dishonest. Trust your own instincts, and manage your own affairs. You are a big man and must handle yourself carefully to be independent in musics.
What this shows... (Score:5, Insightful)
I think these figures are pretty conservative as to the amount of money that bands can make from online sales. I would much rather do business in this way than to do it the RIAA's way. And yes, this does nothing to touch the piracy issue, but we all know that whole Linux distros are freely available for download on the Internet; and this hasn't ruined Linux, has it?
Re:What this shows... (Score:5, Insightful)
1. 1 song @ $0.70 x 1 download = $0.70
2. 1 album @ $7.00 x 1 download = $7.00
3. 499,999 copies of each downloaded from Gnutella/Limewire/etc. = priceless.
Dreams? (Score:5, Funny)
Rock Star? I always dreamed of working for the RIAA. I started young, charging my first royalty at the age of six. One day I hope to have a global surcharge named after me. That would be the ultimate bragging right.
Rock Star? (Score:3, Funny)
Actually, I wanted to be Liberace [robert.to]. I never made it.
So.... (Score:4, Funny)
Also there aren't "bands" these days mainly due to economics, everything is "projects" these days. A player will be juggling schedules rehearsing and playing multiple projects and doing side gigs to pay bills, hoping one of these projects gets signed, records, and tours. It's sad that players today don't know what it was like to be a band. To grow together musically, the family of band members and supporters. I still have a lot of friends in the business and it is way to commericial these days.
Perspective from a major label musician. (Score:5, Interesting)
I have these thoughts:
1. The article is totally accurate.
2. Anybody who thinks successful musicians make it back in touring or merchandise is A COMPLETE IGNORANT IDIOT. Once you get close to going gold this might be true, but as the article pointed out, this happens to 138 of 30,0000 records.
3. My sold out tour of the west coast was the first profitable tour in almost a decade of touring. I made $80 a day once the profits were tabulated.
4. Merchandise sales are not major sources of revenue, but they help stem the bleeding. Less then half of that $80/day was from merchandise.
5. One word: EXPENSES. It's not just the money you get. It's also the money you pay out. And touring is expensive. Don't be one of those assholes who says "ah but the bands make it back from tours and merchandise"
6. A shitty sys-admin can do $30-40k a year.
7. A top notch musician who has practiced most of their life and given countless sacrifices for their job and has gone gold will do about the same.
8. A top notch musician who hasn't gone gold will be broke.
9. A shitty musician will be in debt.
10. Mama don't let your baby's grow up to be musicinas.
Re:Perspective from a major label musician. (Score:3, Interesting)
There was a van we rented from a friend for $30 a day. We slept five to a hotel room, and stayed with friends on two of the 9 nights. We brought no tour manager or sound person. We had a friend who helped out with stuff for per diems ($10 a day) only. How's that for low overhead?
We were gone for 10 days. We did around $7000 in cash (generally small to mid size clubs - largest payday was $2k). After paying for the van, gas, hotel, per diems, strings and other equpiment, booking agent (15%), and other etc. we netted $3200. Split 4 ways that was $800, or $80 a day.
I'm interested in how you are setting things up to turn a profit. Please feel free to email me details. I could stand to learn a trick or two.
I've Posted This Before... (Score:3, Insightful)
That means if the entertainment industry cheeses you off, then you quit buying CDs, DVDs and stop listening to music radio. You then tell your friends why they should be doing the same thing.
Consumers in this country hold the purse strings. Stop complaining and vote with your dollars.
This also works for those of you upset over the outsourcing of employment to other countries. TELL those companies why you refuse to do business with them each and every time they approach you for your hard earned dollar.
Remember, you hold the purse strings. Of course, it's easier to moan about it on Slashdot and exchange goatse trolls rather than taking a stand on an issue in which you believe. I mean, you *can't* possibly live without your tunes, right?
Re:I've Posted This Before... (Score:4, Insightful)
It is not an either/or proposition. People should keep complaining and vote with their dollars. In fact it is pretty importatnt that people do both, because if they just vote with their dollars then the music industry will continue to pretend that declines in revenue are due to piracy. We need to complain long and loud so that everyone knows the real reason - poor quality products combined with an unrelenting series of legal attacks on their own customers.
Too many "They make money touring" comments (Score:5, Insightful)
Bands do not make big money touring.
Bands do not make big money touring.
Sure, they make a living sometimes, but most of the time they don't.
Band's tour for two reasons: They love to play music, and they want to promote the sales of their albums.
Tickets cost $200 sometimes because people are willing to pay it. If you can sellout a show at $20/ticket, then why not charge $30 (etc. etc.) and it grows from their. The money just gets spent making the show bigger, brighter, and louder.
The costs for putting on a concert are staggering. Just the local labor alone can be as much as $10,000 (or more) for an event. It costs $2/mile/truck to send the show down the road. Each truck. Each bus.
Why do you think some bands accept corporate sponsorship for their tours? Many (well-known) bands would lose money trying to tour if they didn't have the sponsorship money.
Merchandising? By the time the venue gets their 20%; the sales company gets their cut; the designers, manufacturers, etc. get their cut, there isn't much left for the band.
We know where all that ticket money goes.... (Score:4, Funny)
*ducks*
Anyone else do the math? (Score:3, Interesting)
And if I wasn't hungry, I'd show you how the newspaper managed to double-count for some of the money, and lose some elsewhere, but it'd take a spreadsheet.
Bottom line, rock stars are dumb for thinking they're only making $40K on a gold record.
Re:Anyone else do the math? (Score:3, Insightful)
Doesn't sound like much, but the average person, after payroll taxes, transportation costs, food, work equipment, repairs, and other necessary incidentals, is likely to be left with closer to $4K in their pockets. Plus they are usually stuck doing a job they hate, without the free booze, pot, sex and limo rides.
Really, although people unreasonably romanticize the amount of wealth it will generate, being a rock star isn't such a bad gig. You don't see too many successful musicians walking away from their careers to go wait tables.
why do bands make little profit? they're suckers. (Score:3, Insightful)
Amway? Herbal Life? Yeah.
This nation is capitalist and if you are too stupid to ensure you are properly compensated for your efforts, you are giving work away for free. In this case the fools are giving it to record labels, and that's fine with me. When I buy something it's because I'm paying what it's worth too me. If the wrong people profit, too fricken bad... I still get what I want.
And you can't say "well people buy crappy music, thereby supporting an artificial economy perpetuated by marketing!!!" IF PEOPLE BUY SOMETHING THERE IS A MARKET FOR IT GOD DAMN IT! And if under the current system no music is produced that anyone wants, the system wont continue existing, now will it? Theres a reason labels continue to profit and it has nothing to do with them being bastards. Nearly everyone acts selfishly. The industry produces a product people apparently want and the competition to be an employee is so intense they aren't obligated to pay fairly.
Labels are trying some legislative things to prop themselves up (and they have the right to do so), but democracy has a solution for that: dont vote for the industry's lackies. And if they still win then the people seem to want the industry supported by laws. If you dont like it, too bad.
The artists will surely revolt, and in the end... (Score:3, Interesting)
Steve Albini and Courtney Love did this YEARS ago! (Score:3, Insightful)
Not the Whole Story (Score:3, Interesting)
Writing royalties: the 15% deal doesn't include writing royalties. If you are a musician then you probably know that the big money comes from royalties (radio play, selling rights for advertising, etc.). That is why copyrights are important to artists. In this hypothetical deal I doubt the band would sign away their ownership; if they did then they are probably idiots. There are plenty of previous examples to learn this lesson from (Bruce Springsteen, the Beatles). In a few cases it is worthwhile - to get a song recorded by Celine Dion the writer must give up 50% of the royalties, but there is almost a guarantee of sales, so it can be a winning concession. Just ask Dan Hill, writer of "sometimes when we touch"
"The record company keeps the packaging and "free goods" funds. After collecting a $9.99 wholesale price, it also reaps an additional $829,900." The article gives the impression that the record company is keeping all this money, but it is going to pay for manufacturing, distribution, advertising, rent and salaries, all the same costs a computer company has, or a software company, or a fast-food company. If a group of musicians wants to take on all these responsibilites and release their product themselves, they can do it, and many have, successfully. (Barenaked Ladies - who moved on to working with a major record company)
Live Performances: for an up and coming band, performing is simply advertising, so touring is not a typically big a money-maker, but if well managed then it can bring in some money. The bigger the band is then the more likely they are making money performing.
The Benefits of Being Self-Employed: If these hypothetical guys are smart then they have an accountant writing off everything under the sun as an expense and they aren't paying much tax.
I've already read a huge number of replies ranting about the greedy music industry. While I agree that there are plenty of creeps and dick-wads involved, that goes for the musicians too, and as I mentioned we are talking about a business, which exists to make money. Yes, they have made and do make bad business decisions, but all areas of business do. Anyways, calling the companies greedy for charging too much for music is really calling the kettle black. They are not witholding air, water or food. It is just pop music, and insisting that you have some sort of basic human right to those recordings regardless of any investment made by anyone else, that is greedy. You don't need it; you want it.
Don't do it with the RIAA (Score:5, Insightful)
They have their own labels! Death row, murder inc, I could go on and on. These guys were smarter then whitey from the get-go. They produced their own music, and sold it themselves. New artists get picked up by these labels and make ridiculous amounts of money because these labels know how easy it is to market these albums. All you need to do is have a video filled with hot chicks and some Bling, have music that doesnt suck(Doesn't have to be good, Ja Rule sucks heavy fucking ass and is really rich), and the white MTV watching yuppie kids will go out and buy that album in droves.
There is no shortage of smaller record labels that will sign interesting groups. If not, create your own label! Swollen Members did it with Battle Ax records, and the beastie boys eventually came out with Grand Royal as a record company. Hello Nasty sold a shitload of albums, and wasn't promoted by RIAA tools.
If more people followed this business scheme (Basically invented by Puff Daddy and Russel Simmons) when they went for a recording contract, they'd be rich. (See Bow Wow, but it helps that Snoop Dogg was in his corner.)
I don't feel sorry for Idiot Band A when they sign with Mega Asshole Company B, without taking into account whats going on. That's just stupid business practice.
$40,477.25 aint bad (Score:3, Insightful)
Your rant misses the obvious point (Score:3)
How much money did the record companies actually make when they probably lost money on 29,872 albums? Record labels take all the risks on new bands. They deserve the money. Once you have a gold record, you are in a better position to negotiate a better contract for your second album. What's the complaint anyway? The band accepted the contract voluntarily? No one forced them.
Wait till it happens to us. (Score:3, Interesting)
Such is the case in any industry where the work is a lot of fun, and I say this as a warning because the same thing can easily happen to computer programmers. Why? Because programming is a fun and rewarding job, and as soon as the general public figures this out you will have a situation where a) a lucky few get to be paid as programmers b) a lot of programming work gets done for free by the many trying to "make it" in the business. "Oh, but programming is hard", you say. So is being a top-flight musician, and there are plenty of those who have to hump day jobs because there just aren't enough paying positions to support them at what they would like(and are highly qualified) to do.
So while you sit there posting to slashdot, saying "oh well, they can make their money through concerts and selling t-shirts", just remember, the same thing could happen to you one day. Hope you're good at self-promotion. Or that enough people never figure out that programming is fun in a similar way that music is fun. I wouldn't bet on the latter. It doesn't take a genius to coorelate the fact that people already produce a ton of code for free to the speculation that they could get programmers to do their bidding at very generous rates.
Mathematical Analysis (Score:4, Informative)
B = Band, R = Retail, S = Studio, Packaging, production costs, A = Advertising, L = Lawyers, T = Total Left to record company, M = Manager
The Grunts' royalty is 15% of retail. Now, if we take this at face value that means.
B(OfRetail) = 15% * 8,490,000 ~= 1.3 Mil. But since we know this is wrong, let us continue.
"packaging deductions" of 25% So, this translates into, or means that
S = $2,122,500, T = $6,367,500
now we also have, That's a "free goods" charge of 15% So that gives us (since this is advertising)
S = $2,122,500, A = $1,273,500, T = $5,094,000
Okay, now we are getting somewhere. Now the band gets from this. So, the band's royalty is actually: $764,100
B = T*.15 = $764,100 - Yep!, S = $2,122,500, A = $1,273,500, T = $5,094,000 - B = $4,329,900
Now, The $3,500,000 balance goes to retailers So, we have
R = $3,500,000, B = $764,100, S = $2,122,500
A = $1,273,500, T = $829,900
The record company
R = $3,500,000, B = $764,100, S = $2,122,500, A = $1,273,500, T = $829,900
Okay, our numbers all make sense thus far... now things get weird. Because the band was hot, they got an advance from the record company of $300,000. They spent $200,000 of that recording the album, which included a $50,000 advance to the producer. They pocketed the remaining $100,000.
So this means that the band got $200,000 of their royalties early, and spent $200,000 on recording costs, and the band kept the $100,000. So we have
R = $3,500,000, B = $764,100 - $200,000 = $564,100, S = $2,122,500 + $200,000 = $2,322,500, A = $1,273,500, T = $829,900
Now as well, we have more advertising (the video). So here we go. the label spent $100,000 making the band's first video Which was expected to be paid back
R = $3,500,000, B = $564,100 - $100,000 = $464,100, S = $2,322,500, A = $1,273,500 + $100,000 = $1,373,500, T = $829,900
Whoa, now our numbers aren't lining up as well. Where the problem? The article says: So the royalty drops to $364,100.
For some reason the writer of the article decided that the $100,000 that the artists kept wasn't really paid out to them. Even though they "pocketed the money" or kept it, or however you want to put it. They made $100,000. That's the deficiency. They do fix this later on. Now, let's finish.
But the band's producer also earned a 4% royalty of $203,760, of which he already received $50,000. So the band has to pay him an additional $153,760, reducing their royalty to $210,340. Let's put this as production costs. Since the producer must be paid as well.
R = $3,500,000, B = $464,100 - $153,760 = $310,340, S = $2,322,500 + 153,760 = $2,476,260, A = $1,373,500, T = $829,900
Good.. Good... After pocketing $310,340 (which includes the remaining $100,000 of the advance) All Fixed
the band has to pay their manager 15%, or $46,551, and give 2% of the total deal, or $101,880, to the power lawyer who got them the deal in the first place. That takes the band down to $161,909. Let's see now:
R = $3,500,000, B = $310,340 - $101,880 - $46,551 = $161,909, S = $2,476,260, A = $1,373,500, T = $829,900, L = $101,880, M = $46,551
Total = $8,490,000 - All is accounted for.
Okay, so now that we have all of the numbers worked out.. Whose coming out on top here.
Well, the Retail guys definitely make a pretty penny. ($3,500,000), but that has to be divided over all their stores, so it doesn't work as well.
Studio costs are really high. (Higher than they probably should be.) That would be something of note.. But most importantly... the record company gets T = $829,900
That's it... Sure they get "whatever's left over from packaging and advertising" but that's not going to be that much. So the record company is making very little off this deal.
Really, if this shows anything, it is that the current system is too cost intensive, and that if it were optimized, there may be a better way to save money, and make sure everyone gets paid. It's not a conspiracy people. It's just common sense. These fees have to paid somehow, sure they may be high, but they are still necessary costs.
Personally, I don't see a problem with the record companies persay. I see a problem with how the money is spent recklessly. If you like a song, buy the CD, sure the artist doesn't get much, but it will make sure that more music like it is made in the future. All of those other costs have to be covered as well. If the only people who pay for CDs are people who listen to Britney Spears or Enrique Iglesias (Not saying they aren't good singers), then the only CDs that will be made are those by B.S. and E.I. The artists people are willing to pay for, and make sure that the investments that these companies put into them are returned.
It's simple math, that's all it is, and that's all it will be. It's not a revolution, or a conspiracy.
Completely missing the freakin POINT (Score:3, Interesting)
You don't need the RIAA in todays world (Score:3, Insightful)
I'm not a signed musician, yet last year, I made about $12,000 from my music. Whilst this was by no means a good salary, it is certainly more than any non-gigging musician that I know. The vast majority of that money was from selling homemade CD's directly to the public.
You don't need the RIAA in this day and age. With the power of the internet/mp3's & (god forbid) paypal, who needs a coccaine addicted suit to take the food from your mouth?
Re:not a rockstar (Score:5, Insightful)
Re:not a rockstar (Score:5, Insightful)
Totally untrue. Most of the time these bands produce one record that fits their old style then fall to the hype from the record companies. The record companies will say, "hey, change this and you'll sell a couple hundred thousand more albums", or "Let's sound more like band X so that we can reach a wider audience."
When a band changes just to sell more records, forgetting the fans that got them to the point they are at is, when the band sells out. Sometimes the bands just change as the members get older. But any fan can tell the difference when a band starts "selling out".
Re:not a rockstar (Score:5, Interesting)
A lot of people don't like anything that gets radio play, because that's the crap that people listen to. I think a lot of people don't like anything that's on the radio, because then they get to act like experts, and play along like they understand the something about music other people don't. For the most part, most people don't have an inner genius that conveys more information about high quality music then the rest of the general public. I stopped listening to the 5 years ago, and I have about 20 CD's that I can happily listen to for extended periods of time. I'm not big into music, but I laugh at the pretensious people who act like they know more about music then the general public, because they've decided they know more.... *grin*
Kirby
Re:not a rockstar (Score:3, Insightful)
I know what your saying but I think i'm actually one of those people who act like they know more than most people about music. I've been a musician for some time now, and am studing Music Production and Engineering at Berklee College Music.
But hey, who needs to know what a Tritone Substitution or Modal Modulation is?
Re:not a rockstar (Score:3, Interesting)
It can also be that when something is played on the radio, it's saturated, and what you may like the first or second time, after hearing it on high rotation (and not just on your personal radio, but everywhere you go)for a few weeks, you're heartily sick of it.
Same for movie or TV previews and promos -- after seeing the same scenes a dozen times a day the idea of actually watching the whole thing is abhorrent. Though year later if you catch the rerun without fanfare, you may enjoy it.
Re:not a rockstar (Score:5, Insightful)
Re:not a rockstar (Score:3, Insightful)
Seriously, when you make music, typically you want it to be your life, not just a hobby. If you want to make money doing it, and you're good, you should be able to. Which do you value more? The music musicians make? Or the papers lawyers shuffle around endlessly?
One could say Lawyers put more effort into it. However, I don't think anyone can say that making good music is easy. It's just one of those things that are subjective. Music is something that only a few can make a living doing.
Sorry, but I disagree... (Score:5, Insightful)
I'm a student at Berklee College of Music, and a very serious musician. You do music because you enjoy it, but at the same time- by the time i'm outta here, I'll have over 60 Grand in college loans and i'll be damned if I just 'love music' and not try to pay that off, get a house, get a car, etc.
I really enjoy music, and so does everyone at Berklee. Who doesn't wanna be a rock star though? No, it's not all about money. But you can't live in a cardboard box and play in the subway forever, well some people do, but not me.
And have you considered that if you are a real musician out there doing it you better be making some money to pay the bills, even if you don't get any of the money for yourself.
Studio time is over $100/hour at anywhere decent. Guitars are $2000+ for ones of good quality. A drumset is gonna run at least 2000 also. Think about microphones, preamps, speakers, etc. Ok, that's just the items. But at the same time there's people that need payed. Your manager, booking agent, business manager, accountant, cover artist, web designer, producer, engineer, roadies, lighting designers, etc... They all need to live too, and if you are just playing at people's houseparties, you can't make the money to pay them, let alone you. And don't tell me that professional musicians do it all by themselves. Just open up any cd and look at all the credits. They need to get paid. Go to a concert, it makes money, but it costs money to start up. You need a lighting and sound system, tour busses, etc.
Yes, I love the music. But as a real professional, it's insulting to not try to get paid for your talent. Most programmers program because they enjoy it, but at the same time, program what the boss says, not whatever they are doodling away on randomly.
...most bands LOSE money touring (Score:3, Insightful)
95% of the time, you LOSE money on the road. Remember, you don't get to keep all that money. You have to pay for food, gas, roadies, hotels, the inevitable replacement gear (when yours breaks, is stolen, or left in Missouri by the drunk-ass drummer).
And that's assuming the venue owner decides to pay you at ALL, and not pull the ol' "how about we give you food and beer?" switcheroo.
Often you don't get to sell CDs at your shows (often due to contractual issues). In many cases, the merchandising company makes ALL the money on your T-shirts, buttons, etc. (the band gets about 5% of "profit").
If you're some huge band like Creed, yeah, you can make major cash. But even 1 or 2 levels down, you lose money. You have to have insurance, you have to pay the venue, you have to hire security guards...the list goes on and on.
SUCCESSFUL bands make money on the road. But most bands lose it. And lots of it. In the "old days" (pre-internet), everyone understood that you LOST money on the road, but it served to promote ALBUM sales.
Don't know where this myth got started about it being the other way around.
Re:That doesn't take into account... (Score:5, Interesting)
I am a professional musician who recently put out a record on a major label. I did a west coast tour last month where every show was sold out. Wanna know how much money I made?
$80 a day. And that's with the shows selling out.
The live music industry is the same as the record industry. They've worked it out so that the musicians get nothing.
Re:Touring (Score:3, Insightful)
It cost money to tour. No one NEW gets $200 a ticket. How many Paul McCartney's do YOU know??? Horrible argument.
Re:the real money is... (Score:3, Informative)